Investing directly in the real estate sector may appear to be an expensive proposition for most investors. This is where mutual funds come in, offering a cost effective method of investing in this industry. Real estate funds also offer significant protection against inflationary pressures. Research has shown that they perform better on this front compared to gold and other precious metals. Including funds from this sector in a well diversified portfolio helps increase returns while reducing the risk factor as a whole.
Below we will share with you 5 top rated real estate mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all real estate funds, then click here.
T. Rowe Price Real Estate (NASDAQ:TRREX - News) invests a large share of its assets in companies from the real estate sector. Not more than 20% of its assets may be invested in companies which generate a significant part of their revenues by servicing real estate companies. The real-estate mutual fund has a ten year annualized return of 9.68%.
The real estate mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.76% compared to a category average of 1.45%.
American Century Real Estate (REACX) seeks a high level of total return. The fund invests heavily in equity securities of real estate investment trusts and companies from the real estate industry. The real-estate mutual fund returned 4.77% over the last one year period.
Steven R. Brown is the Fund Manager and he has been managing this real estate mutual fund since 2008.
Neuberger Berman Real Estate (NBRFX) primarily invests in equity securities issued by real estate investment trusts. It also invests in common stocks and other securities issued by companies from the real estate industry. The real estate mutual fund has a three year annualized return of 1.84%.
As of September 2011, this real-estate mutual fund held 42 issues, with 9.12% of its total assets invested in Simon Property Group, Inc.
ING Real Estate A (NASDAQ:CLARX - News) seeks long term capital growth and current income. At least 80% of its assets are invested in common and preferred stocks of real estate companies and real estate investment trusts. It is non-diversified and may also invest in convertible securities and IPOs. The real-estate mutual fund returned 1.68% over the last one year period.
The real estate mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.22% compared to a category average of 1.45%.
Fidelity Real Estate Investment (NASDAQ:FRESX - News) invests the majority of its assets in real estate companies or other investments related to the sector. The fund is non-diversified and invests in both domestic and foreign securities. The real estate mutual fund has a ten year annualized return of 8.88%.
Steve J. Buller is the Fund Manager and he has been managing this real estate mutual fund since 1997.
To view the Zacks Rank and past performance of all real estate mutual funds, then click here.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.
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